Sky Blue Sports & Leisure Ltd & Anor, R (on the application of) v Arena Coventry Ltd & Anor

Sky Blue Sports & Leisure Ltd & Anor, R (on the application of) v Arena Coventry Ltd & Anor

The Council's loan to ACL did not constitute State aid because, applying the MEO test and considering the Council's position as freeholder and shareholder, it could not be said that no rational private market operator would have made the loan on the terms agreed. The Council acted within the wide margin of judgment afforded to it, based on commercial considerations and professional advice. The appeal failed to demonstrate that the judge's findings were wrong or outside the bounds of reasonable decision-making.

Parties
Appellant/claimant: Sky Blue Sports & Leisure Limited; Appellant/claimant: Arvo Master Fund Limited; Respondent/defendant: Coventry City Council; Interested Party: Arena Coventry Limited; Interested Party: Trustees of the Alan Edward Higgs Charity
Jurisdiction
England and Wales
Judgment Date
13 May 2016
Procedural Posture
Judicial Review / Appeal
Outcome
Appeal dismissed
Legal Topics
State Aid, Market Economy Operator Principle, Local Government Powers, Judicial Review, EU Treaty Interpretation
Public Law European Union Law Administrative Law State Aid Market Economy Operator Principle Local Government Powers Judicial Review EU Treaty Interpretation

Case Brief

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Parties

Sky Blue Sports & Leisure Limited

Appellant/claimant

Arvo Master Fund Limited

Appellant/claimant

Coventry City Council

Respondent/defendant

Arena Coventry Limited

Interested Party

Trustees of the Alan Edward Higgs Charity

Interested Party

Procedural Posture

Judicial Review / Appeal

Legal Issues

  1. 1 Whether Coventry City Council's loan to Arena Coventry Limited constituted unlawful State aid under Article 107 TFEU
  2. 2 Whether the Council's decision satisfied the Market Economy Operator (MEO) test
  3. 3 Whether the Council's actions distorted or threatened to distort competition and affected trade between Member States

Ratio Decidendi

The Council's loan to ACL did not constitute State aid because, applying the MEO test and considering the Council's position as freeholder and shareholder, it could not be said that no rational private market operator would have made the loan on the terms agreed. The Council acted within the wide margin of judgment afforded to it, based on commercial considerations and professional advice. The appeal failed to demonstrate that the judge's findings were wrong or outside the bounds of reasonable decision-making.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; judgment of Hickinbottom J affirmed.